Most announced AI data centers may never actually get built

Many of the giant AI data centers in the news may never exist. Bernstein Research, a investment research firm, estimates that only about 35% of announced capacity will get built. That is roughly 170 gigawatts out of almost 500. A gigawatt is a large measure of electric power. The industry has a nickname for the empty promises: "bragawatts."

How the analysts checked

Bernstein began with more than 7,000 data center projects across North America. The data came from Aterio, a company that tracks construction through satellite images, permits and other records. After removing projects already canceled and others, more than 5,000 remained. The analysts then judged each one on three things: whether construction had started, whether electricity was available, and whether the company had built data centers before. "Press releases are cheap…concrete is not," they wrote.

Who scored high and low

Experienced builders did best. Amazon, Google, Microsoft and Meta each got 5 out of 5 for their record of building. Digital Realty, Equinix and CoreSite also got top marks. Newcomers fared worse.

• O'Leary Digital, tied to Kevin O'Leary: score of 0.35 out of 5. It announced 15 gigawatts. Bernstein expects about 3% to happen.
• Joule Capital Partners: 50 projects, 11.7 gigawatts announced. Bernstein expects about 11% to be built.
• Vermaland: 2.2 gigawatts planned in Arizona. Bernstein expects 4%. Regulators rejected its $33 billion La Osa project in late August.

O'Leary Digital disputes the findings. Its CEO, Paul Palandjian, said the research misses early work done before construction starts. He said the company has agreements covering about 11,000 acres in Utah and 13,000 acres in Alberta, and would build in stages. "We would rather be judged on milestones than on a model," he said. Joule and Vermaland did not respond to requests for comment.

The gap between talk and building

Aterio's data shows the mismatch. Roughly 30 to 40 gigawatts of new capacity are announced each month. About 7 gigawatts begin construction. Only 2 to 3 start operating. Aterio's CEO, Sergio Toro, said some companies announce projects without approvals, or file in several places to see which one is chosen. Bernstein also says "stranded" capacity, meaning canceled, delayed or unapproved projects, has surged.

What it means for you

A huge announcement is not a finished building. Investors, businesses planning around AI growth and people living near a proposed site may want to look for signs of real progress, such as construction, power and approvals. Bernstein analyst Madison Rezaei noted that some newcomers could succeed. Analysts simply have less confidence in companies that have not yet shown they can deliver.